January 2010

Whilst trade through Dublin Port fell by 10.5% in 2009, trade volumes in the final three months of the year broadly matched that of the same three months of 2008, leading Dublin Port Company to conclude that trade was starting to stabilise. The reduction in trade over the year was mainly focused on construction related materials and retail goods, and overall trade was down 14% on a 2007 peak, although up 4 to 5 times from 15 years previous.

In addition the DPC note that tourism traffic increased by 18% from 2008, rising from 1.3 to 1.5m, with a 24% growth in the number of cars carried. How much the additional ferry trade are tourists swapping from air to sea, as opposed to additional tourists is difficult to know, but 80 cruise liners visited the port in 2009, carrying 120,000 passengers and crew to Dublin.

To what extent this can be used as a barometer of trade stability for the country as a whole is unclear, but any stabilisation in trade will be a welcome sign for businesses looking for green shoots.

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The Halifax has reported that Northern Ireland house prices rose by 99% over the last decade (end 1999 to 2009). That seems like very good news for homeowners who have owned their home for a while. However, whilst house prices have started to show a slight increase across the rest of the UK in Northern Ireland prices were down 11.6%, Nov 08-Nov 09, and the reversion of stamp duty from £175K to £125K has so far seemingly had little effect. It seems likely that the hiatus in the political process, the shadow of NAMA into Northern Ireland, and its stagnant economy is stifling recovery. Given the prediction that the economy will be in the duldrums until the second half of 2010, it may be some months or longer before the market picks up the follows the UK market into slow recovery.

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*Update* For details on the county breakdown of estates and units as documented in the Department of Environment, Heritage and Local Government’s ‘unfinished estates’ survey, published 19th Oct 2010, see here and here. For an overview of key statistics on housing vacancy, oversupply, unfinished and ghost estates see here.

** To view an interactive map of all 2846 estates in the DEHLG survey and their characteristics see our mapping module.

On Monday we posted an analysis that revealed that there are 621 ghost estates across the country (where a ghost estate consisted of an estate of ten houses or more house built post-2005 where more than 50 percent of units are either vacant or under-construction). What the analysis reveals is that the phenomenon of ghost estates is endemic to every county in Ireland. Simply detailing the number of estates per county, however, can give a false impression of the issue because it takes no account of the size of the overall population. Whilst Cork County (not including the Cork City area) has 90 ghost estates, it had a population of 361,788 in 2006. Leitrim has 21 estates but a population of 28,950. We have therefore standardised the number of estates by per 1000 head of population.

The data reveals is that counties Leitrim (21 estates), Longford (19) and Roscommon (35) have a particularly high ratio of estates per head of population, suggesting that these estates constitute an oversupply in the market. These are followed by Sligo (24), Cavan (21), Monaghan (18), Carlow (15), Cork County (90), Tipperary North (16), Kilkenny (21), Westmeath (18), and Laois (15) (full list below). Whilst some of these estates are vacant holiday home developments, they nevertheless are presently surplus to demand and are unlikely to be purchased in the short term whilst the market is still trying to find its bottom.

Ghost estates for each county per 1000 population

The presence of these estates in the Irish landscape raises some difficult questions concerning what to do about them. Whilst demand might return relatively quickly in urban areas when the economy picks up, and such estates might be used to deal with the social housing waiting list, it is likely that demand driven by demographic change will be weak in rural counties given that recessions generally lead to rural out-migration. It therefore seems likely that many properties in rural areas will remain empty for quite some time before the market picks back up again. Demographic forecasts would suggest population growth will occur over the long term in Ireland, and one would anticipate population levels to rise in the future in both rural and urban areas. There are questions as to whether the houses built in rural areas, in particular, will be fit for purpose by the time the market returns. Unless a strategy is put in place to maintain them, they will be left to the elements and quickly deteriorate.

For those living on such estates there are clearly social concerns about living with few neighbours and/or on estates that are abandoned construction sites with no street-lighting, pavements, or finished green areas, and in locations that lack amenities, services and public transport. Again, a strategy needs to be put in place for dealing with such estates with respect to making them fit to live in and turning them into thriving communities.

Ghost estates are clearly one of the markers of the present recession and it is now time to start to put in place policies that will start to deal with the phenomena, not least for those people who live on them.

Having discussed when the next general election will take place (see below), the next question is: who will win this election? A number of commentators have almost taken it for wrote that Fianna Fáil will lose power after the next general election, while others suggest that the Green Party could lose most, if not all, of their seats in Dáil Éireann. But will this prove to be the case and is a Fine Gael-Labour coalition virtually certain to take power after the next election? I’d suggest that we can consider a number of potential scenarios here:

The Zombie scenario aka the “It’s Not A Case Of If But When” scenario: This scenario effectively mirrors the situation in the UK in the mid-1990s where John Major’s Conservative government clung to power until the bitter end before getting hammered by Labour in the 1997 election. This sees the current government’s popularity levels continuing to remain low, with Fianna Fáil support ratings remaining in the low-to-mid 20s and Green Party support falling below the 2 percent level. The election proves to be a nightmare for the government parties. Fianna Fáil end up practically losing a seat in every Dáil constituency (bar Laois-Offaly!) and even losing two seats in some constituencies, leaving the party without a TD in some constituencies such as Kerry North, Dublin South East and Dún Laoghaire. The Green Party fails to even come close to holding any of their six Dáil seats, most of which fall into the hands of the resurgent Fine Gael and Labour. With the number of Fianna Fáil Dáil seats left in the mid to high 40s, their only hope of retaining power lies in a left-wing coalition with Labour and Sinn Féin dashed by Labour’s reluctance, even in the face of being promised “the sun, the moon and the stars” by Brian Cowen, to be the party that revives the zombified corpse of Fianna Fáil. Brian Cowen becomes the first ever Fianna Fáil leader to leave his post while the party is in opposition, and the party faces into an uncertain future, facing the prospects of being out of power for longer than one Dáil term.

Likelihood: Given the volatile nature of the Green Party support base and the party’s dependence on vote transfers from Labour and Fine Gael in recent general elections – which are likely to dry up in 2011/2012, the prospects of a Green whitewash at the next general election are real. But, as we get closer to the next general election, I would expect Fianna Fáil support levels to recover on their currently low levels and the 25% level recorded in last year’s local elections.

The Frankenstein scenario aka the “Sure, It Could Be Worse” scenario: Popularity ratings for the government parties start to improve somewhat during the final years of their term in office, re-electrified by evidence of a recovery in the economy, to the point that, after a competent campaign wherein Fine Gael and Labour fail to delver a killing blow, support levels for Fianna Fáil and the Green Party in the general election are down on their 2007 levels, but not dramatically so. While the Greens lose over half their seats, only retain two of their seats (Dublin North, Dublin South), their electoral performance proves to be better than expected and they also poll respectably in constituencies such as Clare, Cork South Central and Louth, leaving the party with hopes of regaining their lost seats and claiming new seats at a subsequent general election after another period in opposition. Fianna Fáil percentage share of the vote falls in the mid-to-high 30s and, though this represents the party’s lowest share of the vote since they first won power in 1932, the better than expected electoral performance means that they remain the largest party in the state in terms of Dáil seats and the party engages vigorously in post-election negotiations to form a government. While Fine Gael and Labour win a sufficient number of seats to from a government with a small majority in Dáil Éireann, Fianna Fáil manages to stay in power by offering Labour a deal that “they can’t refuse”, including an acceptance of virtually all aspects of Labour’s election manifesto and an agreement to rotate the post of Taoiseach.

Likelihood: Not by any means beyond the realms of the possible, especially given the existence of a residual personal, or localised, for individual Fianna Fáil candidates (“good constituency workers”) even at the worst of times. While Fianna Fáil (at 22%) currently trail Labour (at 24%) in the opinion polls, as we saw with the local elections, when it comes down to the actual voting Fianna Fáil will tend to outpoll Labour significantly mainly because of Labour’s weaker party organisation and the significant areas within the state where Labour Party support is minimal or non-existent. As for Labour going into power with Fianna Fáil, well that’s not likely surely…oh hang on, what about 1992!!!

The Dracula scenario aka the “They Haven’t Gone Away, You Know” scenario: With an unexpected sudden recovery in Irish economic prospects in the lead up to the general election, Fianna Fáil’s support levels improve dramatically over a very short period of time, motivating the party faithful while demoralising the opposition who are left wondering if they will ever manage to get Fianna Fáil out of power. The reinvigorated Fianna Fáil machine manages to capture all the kudos from the resurgence in government popularity, with the Greens lacking the political nous to likewise capitalize, and a strong campaign sees the party’s support levels returning to the levels enjoyed in 2002 and 2007. While the Greens face into the political wilderness, with few or no Dáil deputies, Fianna Fáil is able to form a new government with support from independents and/or Sinn Féin. Fine Gael and Labour are left stunned by yet another electoral reverse, especially after having enjoyed a massive mid-term lead in the polls, and the prospect of permanent Fianna Fáil government starts to look very, very real.

Likelihood: This scenario looks about as likely as a Laois All-Ireland win at the moment, but remember that Fianna Fáil also experienced a mid-term slump in popularity and a bad local/European elections (albeit not to the levels experienced in 2009) during the lifetime of the last government, but ended up winning almost the same level of support in the subsequent general election (2007) that they did in the 2002 General Election. There are two rules to observe here. The first is that most governments experience a loss of support in mid-term, second-order elections (such as local and European elections in Ireland/the UK, or Senate/Congressional elections in the USA) before gaining support again at the following general election. Based on this rule, some degree of a resurgence in Fianna Fáil support in 2011/2012 is likely and the election may ultimately boil down to how skillful the Fine Gael and Labour leadership is in facing/resisting this. The second rule of thumb is the “it’s the economy stupid” and the fact that government survival at general elections ultimately depends on the state of the economy – in which case, a persistently weak Irish economy over the next two or three years will leave Fianna Fáil with little prospect of retaining power, although their support levels will probably recover somewhat relative to their current low ratings.

The shape of the social, economic and political landscape of NAMA Ireland will be strongly determined by the parties who hold power over the next decade, and in particular by the new government that emerges after the next general election. But when will this election take place? Aftermuch speculation of a likely Autumn 2009 in the wake of the potential collapse of the current Fianna Fáil/Green Party/Others government, the government actually managed to survive the three major stumbling blocks that many believed could bring it down – the Fianna Fáil-Green Party renewal of the programme for government negotiations, the NAMA legislation and the December 2009 Budget. It now looks likely that the government will stay in power for the next few years, barring a series of by-election losses. One scenario could envisage an unpopular ‘zombie’ government clinging to power for as long as possible and running the full 5-year term until late May 2012/early June 2012 – another scenario could see a resurgence in popularity for the government with an improving economy leading to the government parties deciding to stay in power for a long as possible to benefit from this, thus running the full 5-year term until late May 2012/early June 2012. So…a Summer 2012 general election is a virtual certainty then? Hmm…

There is one fly in the ointment and that relates to the timing of the next Constituency Commission report. Recently the process of redrawing electoral boundaries for general (and European!) elections has tended to commence immediately after the publication of the definitive population by area census figures (26 April 2007 in the case of the 2006 Census) with the Commission being required to present its report no later than six months after its establishment (the last Commission publishing its report on 23 October 2007, less than five months after the 2007 General Election had taken place). In the wake of the McGrath/Murphy/Molloy High Court case of June 2007, however, the 2009 Electoral Act now stipulates that the process of establishing a new Constituency Commission should commence after the provisional census population by areafigures are published – probably in October 2011 in the case of the next Commission – with the Commission being able to carry out its work of revising electoral boundaries during this period and then publish its report once the definitive census population by area figures are released some time in Spring 2012, and some months ahead of a potential Summer 2012. This does not mean that politicians would be fighting the next general election on the basis of newly redrawn electoral boundaries – a nightmare scenario for political parties which would require them to restart the process of candidate selection in some constituencies and for candidates who might find their political base torn asunder by an unfavourable boundary change and without sufficient time to build up new support bases within a new constituency – it can take many months of debate in Dáil and Seanad Éireann for a new Constituency Commission report to be officially ratified. But the government may not wish to fight the election in an ambiguous scenario where the electoral boundaries for the following general election have been published and dark, albeit unfair, murmurings about “gerrymandering” and “cheating” pervade on the part of candidates and parties whose electoral prospects would be significantly improved by the recommendations of this 2012 Constituency Commission report – possibly feeding in to residual anti-government feeling. Based on this, I think a February 2012 date might be a good bet for when the next general election is to be held – a date by which the government junior partners, the Green Party, may also feel that they have achieved as much as they are likely to from their participation in government and pull out in an attempt to distance themselves from Fianna Fáil.

We’ve been working to try and identify the location of ghost estate developments around the country. To do this we have been using a script to mine an address database that records details on 1.98m residential units in the state to identify all properties built post-2005 where 10 or more units share the same estate/street address and more than 50 percent are coded as either vacant or under-construction. We have then been through the resulting data to clean it with respect to multiple entries relating to the same estate and undertaken some preliminary cross-checking with house sale websites. (more…)

The empty housing/ghost estate phenomenon has attracted plenty of attention on this site and more widely. In the public imagination, such phrases conjure up in the main images of empty estates in Leitrim, Longford, Roscommon and elsewhere, those spectral landscapes of redundant concrete – tax-incentivised, never lived in. But there is of course an urban equivalent – the ghost apartment complex, such as those in Sandyford previously discussed on this blog. Indeed, the presence of many empty residential units in centrally located urban developments near services and transport links side by side with escalating levels of unmet social need is one of the madder contradictions of post-CT Ireland. This all highlights some of the more critical problems with market-driven housing systems (or cities or indeed regeneration processes). With everything utterly dependent on the vagaries of market swings (the stop-go cycles of construction and boom-bust price and rent movements), there is at best a very weak linkage between real housing need and market supply.

One interesting emerging trend in this context relates to the short-term strategies pursued by investors and speculators at a time of downturn. Many it seems have turned to students as a temporary source of rental income while they sit out the slump. This is reflected in several emergent trends. A number of property companies now have “products” targeted at the student accommodation market. For instance, Chubb Properties has several brand new developments on its books targeted exclusively at students. The Gateway Student Village in Ballymun offers a similarly specialised product: 109 3-bed apartments at a rate of €4,000 per room per college year (14th September to 20th June). DIT itself has organised a whole suite of “off-campus” accommodation for students, many of which are advertised on a reserved webpage on the findahome.ie website. One of the more interesting examples is the Herberton Dublin 8 scheme, advertised as “the village within the city” – for students. For generations of students, the village within the city for students was Rathmines. Now apparently it’s Herberton, which incidentally is also one of the two private blocks within the regenerated Fatima Mansions.

Both central and local government have recently taken an interest in this area. At the national level, the Centre for Housing Research (CHR) has recently launched a report outlining the future of student accommodation in Ireland, while at the local level, Dublin City Council has recently taken a direct interest in promoting Dublin as an ‘International Student City’. With specific focus on Dublin, the CHR report highlights a number of schemes in the pipe-line, such as on Cork Street in the Liberties. What it does not say, however, is how the transformation of existing empty properties fits with the plans to create more purpose-built apartments in the near future. The report also stresses the role which student accommodation plays in terms of urban regeneration, with the ambition for new developments to be integrated within their neighbourhoods. This was also raised at a recent seminar on the promotion of Dublin as an International Student City, with the avoidance of ghettoisation of particular student groups (according predominantly to country, region of origin or ethnic background) as a key issue. However, another issue might be how the ad-hoc measures outlined above allow for third-level institutions to develop a long-term relationship with the areas in which their students are now resident. This, of course, is where things may get more complex, and the issue of social specificity comes to the fore. While on one hand, those developments which are in a sought after area may well disguise the fact that they are overwhelmingly dominated by students, others may attempt to use security features as a means of enticing students into an area that has recently undergone regeneration. However, one of the afore mentioned developments, The Village Gate is at pains to advertise itself as a ‘modern spacious gated development’ on its web-page. The gating of student accommodation is, however, something which the CHR explicitly wants to avoid in the development of student housing in regeneration areas.

It’s strange really. Not so long ago, many properties were advertised for working people only. A subset targeted SWA tenants specifically. But students need not apply was not an uncommon strategy adopted by landlords, whether small-scale or corporate. Or maybe not so strange. It would appear that the policy being pursued is to sit out the downturn and in the mean time achieve some kind of rental income by turning to the student market until a better economic alternative can be found. Could that be so? The signature building of the Gasworks development in Ringsend – The Alliance – provides a good example of the complexity of this situation. In mid-2008, Chubb properties were offering rents of €150 per week with all bills included per person to students willing to share twin rooms in two bed apartments. However, in an apparent re-think, the student solution was quickly discarded for a mixture between an ‘apart-hotel’ and long-term corporate letting strategy. According to sources within a number of different letting agencies, this is due to complaints from the management company responsible for the entire Gasworks development regarding the conversion of the Alliance to student residences. Anecdotal evidence would however suggest that the student market is being actively pursued, albeit not officially. For example, the current ad on daft.ie for two bed apartments (€1350 per month) in the Alliance allows the option of converting double rooms to twin rooms. A strategy not dissimilar to the original Chubb promotion. However, through the Alliance website, the apartments are marketed to the corporate letting market as follows: “Each apartment boasts its very own unique view of Dublin City, some of the most impressive being of The Dublin Mountains and the glistening of the sea in the distance. Simply breathtaking!!” Perhaps corporate clients might not welcome their status alongside students as the flavour-of-the-month quick fix to the property market meltdown. With prices starting at €425 per week, and Google’s European headquarters just around the corner, it might also be that the short-term rental market is a more lucrative market than student accommodation (whoever the future owner of the Alliance may be!).

The example of student accommodation raises some pertinent questions regarding the consistency of contemporary planning practice and its relationship to development. Are students being used as a quick-fix but temporary solution as opposed to pursuing a housing strategy with actual benefits for both students and neighbouring residents, not to mention those stuck on housing lists? And what will be the long-term socio-cultural implications of this unplanned spatial trend? How it will all end we don’t know, but for now the news from the busted properties frontline is clear: If all else fails call in the students…